Steel Tariff ''Strategy'' Was ''Successful''
Tariffs aimed at giving US steel-makers ''breathing space''
The following piece was written by US Secretary of Commerce and appeared?on the Editorial Page of the?Wall Street Journal's December 5 edition. It is reprinted with permission.
NEW YORK - 12/05/03 - Yesterday President Bush announced his decision to remove the temporary safeguard measures on steel imports that he put in place in March of 2002.
This decision was made after an exhaustive study by the US International Trade Commission (ITC), intensive consultations with the steel industry and steel consumers, and a careful examination of the state of the global economy in which the steel industry operates. As he did in 2002, the president has made a sound decision for the American economy, its companies, and workers.
Prior to March, 2002, the US steel industry was faced with surging imports of foreign made steel, high costs, inefficient excess steel-making capacity at home and abroad, and the lack of demand for steel in foreign markets. Decades of government ownership and subsidization of foreign steel mills had greatly distorted this market, leading to an un-level playing field that cost American jobs.
After years of neglect, President Bush responded forcefully by announcing a three part plan that, in addition to launching negotiations to establish disciplines on government subsidies and working to reduce inefficient excess global steel capacity, included a temporary safeguard on steel imports, as authorized under US trade law, to address these problems.
The President's plan has worked.
The industry's response to the safeguard has been exemplary. The temporary steel safeguard measures the president imposed over a year and a half ago were intended to provide the domestic industry with the breathing space needed to restructure and consolidate, thereby becoming stronger and more competitive. The steel industry has used this time wisely.
Companies and workers have reached groundbreaking collective bargaining agreements that will be models for the future. Steel-making costs have been greatly reduced and dramatic gains in productivity have been achieved. Today, US steel- makers, both integrated and mini mills, are among the most efficient producers in the world.
In addition, global steel markets have recovered from the ravages of the financial crises that marked the late 1990s. Demand in Asia and Russia has rebounded and China's consumption of steel has increased dramatically. As a result, the US market is no longer alone as the destination of choice for excess foreign steel imports. Changes in pricing conditions in the United States and elsewhere now favor domestic production and US sales to foreign markets. Steel prices have stabilized, imports are at their lowest level in a decade, and US steel exports are at historic levels.
Given the positive changes in the global economy in the last 21 months and the significant adjustments undertaken by the US steel industry, it became possible to lift the safeguard measures. President Bush recognized that the safeguard has given the industry the time it needed to regain its international competitiveness, while, as demonstrated by a recent ITC report, having a minimal negative impact on the overall US economy.
This president and his administration remain committed to America's steel industry and its workers. The successful efforts the industry has made in regaining its international competitiveness need to continue. To that end, the administration is taking several important actions to promote the health and viability of this critical industry:
We will continue to collect data on steel imports through our steel import licensing and monitoring program in order to respond quickly to import surges that could cause damage to the industry.
We will focus on the root causes of the inefficient overcapacity in global steel-making by stepping up our efforts at the Organization of Economic Cooperation and Development to establish new and stronger disciplines on subsidies that foreign governments grant to their steel producers.
We will continue to vigorously enforce our trade laws to ensure that US industries and workers are not injured by unfairly traded imports and have an opportunity to compete on a level playing field with their foreign competitors. To this end, we have created an Unfair Trade Practices Team to monitor and respond to unfair trade practices on a global basis.
We will continue to pursue policies that create the conditions for the steel industry and all other US manufacturers to succeed, including tackling skyrocketing health-care and legal costs, and reforming the energy sector to assure a stable supply for all manufacturers.
The period since the temporary steel safeguard measures were put in place has been marked by an historic adjustment in the steel industry and an improving economy in America and around the world.
President Bush's temporary safeguard measures have successfully led to a revamped US steel industry. America's steelworkers can be confident that they are part of a vibrant industry. Our industry and workers are once again poised to compete in the global marketplace with any foreign competitor for every sale in every market.
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